Trading CVs
Specialising in vehicle transactions, Shriram Automall India Limited is expanding its operations on the back of good growth.
Shriram Automall India Limited (SAMIL), a 100 per cent subsidiary of Shriram Transport Finance Company (STFC), has turned six. Providing a platform to purchase and sale pre-owned vehicles, CVs and equipment, especially through organised and transparent bidding platforms, the company is looking at expanding its operations. Conducting ‘physical’, ‘online’, ‘one-stop classified’ and ‘private treaty’ transactions towards the purchase and sell of pre-owned vehicles, the company, to mark six years of its fruitful journey held 60 bidding events simultaneously recently. The bidding events were held on one single day, and across all the centres the company has in the country. In what could be termed as a display of high level of synchronisation, bidding events were simultaneously held at Shriram Automall’s centres in Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, Madhya Pradesh, Kerala, Odisha, Haryana, Bihar and Uttar Pradesh. Claimed SAMIL sources that over 5000 vehicles and equipment were auctioned on that day. These were valued at over Rs.100 crore. Auctions at SAMIL are a part of a systematic process that calls for interested people to register with them. Only those who have registered are allowed to participate. Commissioning the 66th mall at Agra to commemorate six years of the successful journey, SAMIL is working towards expanding its reach by introducing a mobile app, ‘MySAMIL’. Making it to the ‘Limca Book of Records’ as the ‘largest platform for acquisition and disposal of pre-owned vehicles and equipment’, and for ‘conducting highest number of physical bidding events in a single day’, SAMIL, according to Sameer Malhotra, Chief Executive Officer, Shriram Automall, has in a short span of time become the most trusted brand for all leading OEMs, banks, NBFCS, transporters, leasing and rental companies, vehicle aggregators, dealers, contractors and individuals. It is a brand that they look up to, to dispose their pre-owned commercial vehicles, construction equipment, farm equipment, passenger vehicles, three-wheelers and even twowheelers.
Transactions
A visit to SAMIL’s centre at Panvel revealed that there were 155 vehicles listed for auction. Over 152 bidders registered for the
event. Over 80 vehicles went on the block, and were successfully traded. The total transaction value according to SAMIL sources was in excess of Rupees-two crore. For all the centres combined, SAMIL transacted vehicles and equipment worth Rs.50 crore in that day. A new high for a single day business transaction according to Malhotra. Braving the harsh weather, and rising temperatures, indicating the onset of summer, Goldy of Ulhasnagar-based Shiv Shakti Transport, came to the event to buy a good used truck to add to his fleet of 12 trucks. Claiming to be a regular visitor, Goldy said that the number of CVs auctioned at the event, whenever it was held, were good. While SAMIL sources claimed that the auction is held twice every month, Goldy expressed, “The maths behind an eight year old Tata truck would be an opportunity to save to the tune of Rs.18 lakh on a truck.” This truck, at the previous event, did not sale, he mentioned. If Goldy could have the truck for Rupeessix lakhs, financed 100 per cent by STFC, against a price of Rs.24 lakh for a new truck, it would amount to a good deal of saving. There would be little liability in the short term. Drawing attention to the lucrative nature of pre-owned vehicles, Goldy averred, “A price depreciation of Rupees-two lakh kicks in every year. A brand new truck thus amounts to a loss of Rupees-one lakh on its valuation the moment it is bought.” “In the case of this truck, I can invest in repairs to get to a good running condition if the need be,” he added.
Milind Chauhan operates a tourist car company called Amit Travels, and is based at Dahisar in Mumbai. He came to the auction to buy a tourist passenger car with the intention to earn a good profit by reselling it to a rural buyer in the short term. Chauhan kept a close eye on the condition of cars being auctioned, aware of the fact that a worn out battery or a need for major repair would lead to a big cut in his intention of earning a profit from a resale. Mentioned Chauhan, that it is often that the seller hasn’t done the mandatory ‘fitness passing’ of the vehicle, and would result in an amount of expenses for the buyer. “If you are careful, and aware of what to look for, you could end up with a good deal.”
Bidding process
Of the four distinct channels used to bid at SAMIL – physical bidding, online bidding, private treaty and through a one-stop classified kiosk, it is the physical bidding channel that garners 90 per cent of the business according to Umesh Govind Revankar, Managing Director & Chief Executive Officer, STFC. “Over 90 per cent of the business
comes through the ‘physical channel’. The ‘kiosks’ haven’t added much to the volumes, and we are slowly looking towards tapping the mobile segment, he averred. The mobile application is said to facilitate participation in live bidding events, submission of proxy bid for vehicles, digital payment options, customer registration and uploading of KYC documents apart from notifying the customers of the latest developments in the company. “In Classifieds, we haven’t really invested too much. It is a medium that needs substantial investment, both in terms of technology, upgradation and up-keep,” he mentioned. Revankar averred that his company is looking at diverting its profits towards technology addition going forward. In ‘private treaty’, SAMIL negotiates deals as a mediator, between the buyer and the seller. This channel is exclusive to big ticket clients, and accounts for few select transactions for the company. The ‘physical’ bidding process highlighted a medium that facilitates seamless transactions. Especially when one considers the value additions like easy finance, refurbishment, valuation, documentation, and insurance.
Stating that there is an urgency to replace an existing vehicle with a more efficient one as fuel prices are rising, Revankar opined, “The need for efficient vehicles is creating a demand for used vehicle transactions.” SAMIL, in the next financial year (FY201718) is looking at 30 per cent topline growth. In the long-term, the company is looking at doubling the number of centres from the current 64 to over 150. To do so in a sustainable manner, and with good revenue to support healthy growth, the company is looking at a franchise model.